Elreco

1500 farmers gain better access to microcredit

Due to their non-transparant bookkeeping, 1500 farmers from the Elreco-supervised co-operatives in Kenya have no access to microcredit. This hampers the farmers' business operations and limits the opportunities for growth.

About Elreco

Elreco is an organisation that improves the position of poor farmers by training them in marketing skills and giving them access to finance, such as microcredit. 1500 farmers are organised into saving and credit co-operatives (SACCOs), one of which is called MEFAT (Micro Enterprises Farmers and Traders). Joshua Kibet of Elreco trains MEFAT members in their professionalisation process.

Business case

The dairy farmers of MEFAT are very small farmers (less than two cows) and are therefore unable to provide sufficient security for microcredit. Joshua Kibet of Elreco seeks advice on other possible ways of gaining microcredit.

Results

Analysis 

With the aid of simple calculation models, the participants from SharePeople demonstrate that the farmers are making less profit than the co-operative thinks. In order to make up the cash deficit, the farmers indulge in all kinds of sidelines and, in lean times, borrow via the ‘Merry-go-round principle'  from neighbours and acquaintances. Due to the different cash flows, they do not know how much their farming business yields. It turns out that they more often make a loss than a profit.

Advice

In co-operation with Joshua Kibet, the participants help the farmers to administer their business activities better using simple methods. This makes it easier for them to work towards maximising profits and increasing the savings capital of MEFAT, thereby creating access to microfinancing.

Impact for the overseas partner 

Thanks to SharePeople, the 1500 farmers under Elreco's guidance have started to operate more efficiently. Elreco also uses the knowledge acquired as lessons learned in supervising other co-operatives. In addition, Joshua Kibet gained greater financial insight through his participation in the programme. He is now in a better position to advise and train his farmers in financial management.

SharePeople is also assisting co-operative manager Joshua Kibet in enhancing his leadership skills. Thanks to coaching from De Baak, he has become more assertive and he is able to substantiate his opinions more forcefully.

Evidence of Joshua Kibet's enhanced leadership is the invitation he received from ICCO to represent the small farmers during a trade mission for Dutch farmers and the Netherlands Embassy in Kenya. This is expected to provide new impulses for strengthening the financial position of the farmers, so that they can make their businesses economically viable.

Impact on the European professionals

A Dutch banker wanted to improve his knowledge of microfinancing and the funding of investments in developing countries. With the SharePeople experience, he landed his ideal job.

For another Dutch participant, SharePeople fitted perfectly into her CV, which included various management courses. As a result, she was given the opportunity to supervise merger programmes within her company.

Impact on the European company 

For a major Dutch bank, co-operation with SharePeople meant that the leadership qualities of one of its managers were enhanced.

Follow up

In 2009 Joshua Kibet started his own company, called Agric Chain Development, as a business development service provider. He assists farmers to get more added value to their products by creating supply chains. One of his clients is ELRECO, where he used to work. ELRECO is still involved with MEFAT, the dairy farmers cooperative which is improving the farmers stable income. SharePeople follows up on both organisations: Agric Chain Development and ELRECO. Joshua participated in the SharePeople Experience Week in July 2009. For him, this was a great opportunity to exchange experiences with other BDS providers, to hear more about access to EU markets and certification needs and to meet new business partners.